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COVID-19 social grant extended until 2025

Location: News

COVID-19 social grant extended until 2025

Government has extended the COVID-19 Social Relief of Distress Grant (SRD Grant) until March 2025 while it considers social security policy reforms and a funding model.

The grant was introduced to support low-income individuals affected by the lockdowns during the COVID-19 pandemic.

Delivering the Medium Term Budget Policy Statement (MTBPS) to Parliament on Wednesday, Minister of Finance Enoch Godongwana said R34 billion has been allocated to extend the grant by another year.

“Over the medium term, a provisional allocation is retained while a comprehensive review of the entire social grant system is finalised. The 2023 Budget indicated that the COVID-19 Social Relief of Distress grant was only funded until March 2024.

“Government proposes that the fiscal framework make provision for funding for the grant for 2024/25. Beyond this, a comprehensive review of the entire social grant system by the Department of Social Development and the National Treasury is required,” Godongwana said.

Over the 2024 medium-term expenditure framework (MTEF) period, 61%  of consolidated non-interest spending goes to the social wage — combined public spending on health, education, housing, social protection, transport, employment and local amenities.

“Of this amount, R945.9 billion will be spent on social protection transfers, including the old age grant, the child support grant, the disability grant and the COVID-19 social relief of distress grant. South Africa’s social protection expenditure programme, measured as a percentage of gross domestic product (GDP), is one of the largest among developing countries,” he said.

The 2019 MTBPS noted that by 2040/41, social assistance beneficiaries – excluding the temporary COVID-19 social relief of distress grant – were projected to increase to 22.5 million, necessitating spending on social grants amounting to 3 % of GDP annually.

“This is in line with current grants spending, excluding the temporary grant. If that or a similar type of new grant is made permanent, beneficiaries are projected to expand from 27.3 million in 2023/24 to 40.4 million in 2040/41, which will cost 3.8 % of GDP in 2040/41 and require a corresponding permanent source of funding, such as additional revenue measures,” he said.

Education

Although additional funding has been provided to implement the 2023 public-service wage agreement, provincial education departments are constrained in hiring additional teachers.

The Minister warned that this could lead to larger class sizes and higher learner-teacher ratios, possibly resulting in weaker educational outcomes.

“To mitigate this, the sector will improve the approach to allocating teachers to schools, ensure that learner and teacher support materials are used cost-effectively, manage infrastructure projects more tightly and focus on plans to catch up on lost teaching time,” Godongwana said.

Institutions in the post-school education and training sector, including the National Student Financial Aid Scheme, will need to bring their student enrolment and bursary allocations in line with their budgets.

Planned infrastructure spending will be brought in line with institutions’ ability to spend.

Continued health services

The Minister said the health sector is aiming to maintain service delivery amid budgetary constraints.

“While additional funding is provided to cover wage increases, baseline reductions are being implemented as part of fiscal consolidation. To minimise negative effects, the sector will need to improve efficiency in areas such as overtime payments, medical supplies and security services, and to delay infrastructure projects.”

The South African Law Reform Commission is finalising a report on legal reform to manage medico-legal claims, which constitute a significant financial risk.

“To address funding fragmentation for oncology services, allocations will be shifted from the national health insurance grant to the national tertiary services grant.

“A single grant is also proposed to consolidate the existing personal and non-personal services components of the national health insurance indirect grant. Funding is also redirected towards the Office of Health Standards Compliance to strengthen the Health Ombud,” the Minister said. –SAnews.gov.za

 

nosihle
Wed, 11/01/2023 - 14:07

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Fiscal consolidation needed to ensure marvelous financial health

Location: News

Fiscal consolidation needed to ensure good financial health

Government will adopt a “prudent fiscal stance” which will aim to balance spurring economic growth, supporting society’s most vulnerable groups, stabilising public finances and reducing economic and fiscal risks.

This tough balancing act was revealed in the Medium Term Budget Policy Statement (MTBPS) released on Wednesday.

“A balanced fiscal stance will…also support higher levels of private-sector investment and employment. In the context of limited resources, this requires prioritisation. Over the next three years, the fiscal framework supports strong control of the public-service wage bill, protecting crucial frontline services and implementing efficiency measures.

“Government’s commitment to restoring the health of the public finances means that the debt-to-GDP ratio is still forecast to stabilise in 2025/26 – although at a higher level than projected in the 2023 Budget,” the document read.

The MTBPS laid out how it will implement fiscal consolidation measures including reduced spending, “efficiency measures across government and moderate revenue increases”.

“The proposed fiscal consolidation measures will be targeted, leaving some functions with funding levels similar to the 2023 Budget, and will also maintain the social wage. Over the medium term, these measures will include the reconfiguration of government, with the merging or closure of public entities resulting in a reduction in transfers to such entities.

“Together, these targeted measures are expected to result in savings and long-term gains from improvements in the efficiency of public spending and budget allocations. This is key to managing the public finances in a prudent and responsible way, and will also support longer-term economic growth.”

The key elements of government’s medium-term fiscal strategy as set out in the MTBPS include:

  • Realising a primary budget surplus in the current year, meaning that revenue will exceed non-interest spending for the first time since 2008/09. The surplus will grow over the medium term, narrowing the budget deficit and allowing debt to stabilise by 2025/26.
  • Stabilising debt to enable government to arrest the trend of rising debt-service costs. Debt-service costs will peak as a proportion of revenue in 2026/27.
  • Targeting spending revisions to protect critical frontline services. Baseline budgets for basic education, health and the police are projected to grow in nominal annual average terms, although below consumer price index (CPI) inflation, over the 2024 medium-term expenditure framework (MTEF) period. Spending on the community and economic development functions will grow by 4.5 per cent and 6.2 per cent, respectively. In contrast, spending on general public services grows marginally over the medium term.
  • Implementing a reconfiguration of government functions, as outlined in Chapter 1, in line with the President’s commitment during the 2023 State of the Nation Address.
  • Keeping the composition of spending broadly in line with existing policy. Over the medium term, the wage bill continues to grow on average below CPI inflation. Over the next three years, capital payments and transfers will grow by a nominal annual average of 8.4 per cent, while consolidated spending on the wage bill, goods and services, and current transfers and subsidies grows by 3 per cent. Government is implementing measures to improve the financing and execution of infrastructure projects.
  • Introducing moderate revenue increases to support fiscal consolidation, while limiting the negative effects on the economy.
  • Developing new fiscal anchors to ensure sustainable public finances. Work on these is under way, and an update will be provided in the 2024 Budget.  – SAnews.gov.za

 

NeoB
Wed, 11/01/2023 - 14:09

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Government forges ahead with restructuring the State

Location: News

Government forges ahead with restructuring the State

Work is underway to reconfigure the structure and size of the State as part of government’s efforts to improve the efficiency and effectiveness of public spending.

“This Medium-Term Budget Policy Statement (MTBPS) supports measures to lift our growth prospects over the medium term and restructures the State to become more effective,” Minister of Finance Enoch Godongwana said on Wednesday while delivering the MTBPS in Parliament.

Government is preparing a joint plan to rationalise departments, entities and programmes over the next three years

The Presidency, National Treasury, Department of Public Service and Administration and the Department of Planning, Monitoring and Evaluation are formulating high-level recommendations on programme and entity closures.

“A dedicated technical team, consisting of the appropriate legal, financial and human resource expertise has been created to facilitate implementation. Over the last three years, the National Treasury has conducted a series of spending reviews.

“In many cases, these reviews have highlighted deficiencies in policy choices and programme design, scale and cost. They have also revealed shortcomings in planning and implementation, which result in overlapping mandates and functions, and duplication of effort. Government considers these inefficiencies to place a further drag on the economy,” the Minister said.

The following criteria will be used to determine whether a department or entity should be closed or merged:

  • The performance and size of the entity or department, especially if it is no longer fulfilling its mandate or does not have capacity to fulfil its mandate.
  • The ability of a larger department to absorb the function(s) of a small department.
  • The duplication and overlap of functions across departments and entities.
  • The clarity and execution of the legislative mandate.

“The Department of Public Service and Administration, the National Treasury, the Department of Planning, Monitoring and Evaluation and the Presidency will, over the medium term, review and reconfigure executive functions to address duplication of functions, close ineffective programmes and consolidate departments and institutions.

“Measures will be proposed based on spending reviews conducted in 2020/21 and 2021/22, which suggest a general need to ensure that programmes are designed to be affordable and avoid overlapping policy mandates,” Godongwana said.

The changes are expected to lead to reduced executive responsibilities, higher fiscal credibility and savings in non-interest expenditure

Public sector wage bill

The 2023 public service wage agreement included higher-than-budgeted remuneration increases.

As such government has made a strategic decision to allocate funds to sectors that are personnel heavy, such as health, education and police services.

“Additional funding of R24 billion this year and R74 billion over the medium term will be used to fund the 2023/24 wage increase and the associated carry-through costs in these sectors.

“Since the 2023 Budget, several fiscal risks have materialised. Corporate tax collections – primarily mining sector revenue – underperformed and the revenue outlook weakened. The 2023 public-service wage agreement increased the cost of compensation of employees,” the Minister said.

He indicated significant trade-offs and claw-back mechanisms are being implemented to mitigate the impact of these higher costs on the fiscal framework and to contain the budget for compensation of employees.

“Government has issued a directive to national and provincial departments to implement control measures for creating and filling vacant posts, including restrictions on recruitment for less-critical posts. Government is assessing further controls on personnel budgets, including by providing incentives for early retirement,” the Minister said.

Godogwana said the presidential employment initiative will be extended for another year through repurposing of a portion of funds from existing public employment programmes such as the Expanded Public Works Programme and the Community Works Programme.

“A comprehensive review of public employment programmes is underway,” the Minister said. – SAnews.gov.za

nosihle
Wed, 11/01/2023 - 14:10

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Municipalities apply for Eskom debt relief

Location: News

Municipalities apply for Eskom debt relief

More than 60 municipalities who owe Eskom for unpaid bulk electricity services have applied for government’s debt relief arrangement.

This was revealed by Finance Minister Enoch Godongwana while delivering the Medium Term Budget Policy Statement (MTBPS) in Parliament on Wednesday.

“By October 2023, 67 applications had been submitted, totalling R56.8 billion or 97 % of total municipal debt owed to Eskom at end-March 2023. Twenty-eight applications have been approved; the remainder are being assessed and verified with provincial treasuries,” Godongwana said.

The programme was announced earlier this year to assist ailing municipalities who are struggling to pay their electricity bills.

“The debt-relief arrangement for Eskom outlined in the 2023 Budget noted that a large proportion of outstanding municipal debt is owed to Eskom. National government has introduced support to relieve municipalities of debt to Eskom.

“The debt…will be written off over a three-year period, in equal annual tranches. This is provided the municipality complies with set conditions. These conditions include enforcing strict credit controls, enhanced revenue collection [and] up-to-date payment of Eskom monthly current account.

“The ultimate goal is the profound transformation of these municipalities, by empowering them to build financial resilience, amplify their capacity to generate sustainable revenue, and rekindle a culture of paying for services rendered,” Godongwana said.

Eskom Debt Relief Amendment Bill

At the delivery of the MTBPS, Godongwana also tabled the Eskom Debt Relief Amendment Bill which seeks to enhance the “enforceability of the conditions agreed” under the R254 billion government to Eskom debt relief agreement.

“It provides for the payment of interest by Eskom on amounts advanced as part of the debt relief loan. The Amendment also provides for the reduction of the amount of debt relief available to Eskom, in the event that the entity does not comply with the National Treasury conditions.

“These principles and strict conditionalities, greatly enhanced by the Amendment, are a key part of how we will deal with Eskom and all other state-owned entities, to avoid a repeat of the mistakes of previous bailouts,” Godongwana said.

Meanwhile, the extended MTBPS says Eskom’s R254 billion debt relief has been incorporated into both the balance sheets of government and Eskom – “implying an increase in government debt”.

“As at 30 September 2023, government has disbursed R16 billion of the R78 billion debt relief for 2023/24. A task team has been established with officials from the National Treasury, the Department of Public Enterprises and Eskom to monitor compliance with the conditions and report quarterly on whether Eskom qualifies for the conversion of the loan to equity.

“This [debt relief] arrangement will enable the utility to undertake much‐needed maintenance and investment, and to improve its financial position. Eskom’s financial sustainability remains at risk from poor generating plant performance, declining sales, lack of cost‐reflective tariffs, rising municipal arrears and high debt‐service costs,” the policy statement noted. – SAnews.gov.za

 

NeoB
Wed, 11/01/2023 - 14:11

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Reforms can enhance GDP

Location: News

Reforms can enhance GDP

Finance Minister Enoch Godongwana says the Medium Term Budget Policy Statement (MTBPS) prioritises reforms aimed at enhancing the growth of the Gross Domestic Product (GDP).

He was delivering the MTBPS in the National Assembly in Parliament in Cape Town on Wednesday.

“To this end, excluding interest, funding for capital projects remains the fastest-growing item by economic classification. Furthermore, we are introducing a new mechanism for improving the pace of delivery of capital projects,” he said.

The Minister was cheerful about the electricity sector’s “enormously positive transformation” due to reforms.

“We are reaping the fruits of our efforts to reform the electricity sector, including the easing of restrictions on self-generation and encouraging private investment in the area.

“At the same time, we recognise the potential loss of revenue due to private electricity generation, and the fact that traditional revenue models relied on by public entities like Eskom, face serious disruption.

“It is for these reasons that our electricity reforms are holistic, evidenced-based, and geared to find a balanced solution to our electricity supply challenges. They take into account not just a particular entity but the transformation of the sector as a whole,” he said.

According to the extended MTBPS, some of the major reforms in the energy sector comprise::

  • Three projects under the Risk Mitigation Independent Power Producer Procurement Programme, with capacity totalling 150 MW, will be ready for connection to the grid in November 2023.
  • By 2025, nine projects with a total capacity of over 1 000 MW will be connected to the grid under the Renewable Energy Independent Power Producer Procurement Programme, with a further 1 000 MW expected in the next phase.
  • In June, Eskom released interim rules to ensure fair and transparent allocation of limited grid capacity.
  • In August, Cabinet approved an amendment to the Electricity Regulation Act (2006) for public comment. The amendment aims to establish an independent transmission system operator and a competitive electricity market.

Turning to the logistics system, the Minister said the system faces significant challenges which have cost “up to 5 percent of GDP in 2022, with losses in the region of R50 billion in the minerals sector alone”.

The extended MTBPS notes that the cost of rail inefficiencies last year is estimated at R411 billion.

“Given the scale of the challenges, the National Logistics Crisis Committee was instituted to broaden reforms in the sector and prioritise reforms aimed at resolving the immediate crisis, while also addressing the structural aspects hampering the sector.

“This approach is consistent with the key lesson from our reform of the electricity sector, that resolving these challenges must be based on transforming the sector, and not trying to save an entity,” he said.

Godongwana said a “dysfunctional” Transnet – which remains at the heart of the logistics sector and the movement of goods – has serious implications for business, people’s lives, the economy and the country’s global competitiveness.

“No modern economy can thrive and grow new industries if rail lines are beset by delays, and ports are unable to efficiently handle incoming and outgoing cargo. Transnet’s performance in this regard has been underwhelming and its operations have been strained by a worsening financial state.

“Recognising the seriousness of the situation, the National Treasury is working with Transnet and the Department of Public Enterprises to ensure that Transnet can meet its immediate debt obligations,” he said.

The Minister said in this regard, a Freight Logistics roadmap will guide reforms in the sector.

“The roadmap sets out a clear path for enhancing efficiencies, facilitating the introduction of competition and leveraging the financial and technical support of the private sector.

“Only once these three objectives are reflected in Transnet’s corporate and operational plans, will there be a conversation about whether and how government can provide financial support to transform the logistics sector,” Godongwana said.

Improvements in areas such as financial management and financial governance are being prepared.

“These reforms will respond to the recommendations of the Zondo Commission, the Mpati Commission, and the Nugent Commission.

“I will…table an Omnibus Bill for public consultation, which will include key amendments to various pieces of legislation, including the Public Finance Management Act of 1999 (PFMA), Municipal Finance Management Act of 2003 (MFMA) and South African Revenue Service Act (SARS Act),” Godongwana said. – SAnews.gov.za

 

NeoB
Wed, 11/01/2023 - 14:13

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Funds allocated for future disasters

Location: News

Funds allocated for future disasters

To cater for the growing pressures imposed by climate change on infrastructure, especially at the local level, government has created a resource pool to specifically respond to future disasters.

“In this regard, R372 million has been added to the Municipal Disaster Response Grant, while R1.2 billion has been added to the Municipal Disaster Recovery Grant, to cover the repair and rehabilitation of infrastructure damaged by flooding in February and March 2023,” Minister of Finance Enoch Godongwana said on Wednesday in Parliament.

Tabling the Medium Term Budget Policy Statement (MTBPS), the Minister said mitigating the environmental risks posed by climate change must go hand-in-hand with addressing the financial and economic risks posed by climate change.

“The National Treasury is making progress towards developing a disaster risk financing strategy, which will among others, enhance existing risk financing instruments. Despite a robust legal framework, gaps exist in financing and implementation, including overreliance on budget reallocations.

“The National Treasury is analysing fiscal vulnerability and implementing policy reform to improve disaster resilience, reduce risks and ensure resources are efficiently allocated. The strategy adopts a risk-layering approach, incorporating multiple financing instruments based on the incidence and severity of shocks,” the Minister said.

It aims to strengthen governance, improve data quality and build financial and fiscal sustainability. The draft is expected to be ready during 2024/25.

Separately, the National Treasury has initiated the design and piloting of a climate budget tagging system to incorporate climate considerations into public financial management processes.

“The first phase of the project, from October 2020 to October 2022, involved consulting on the design of this system, conducting workshops to raise awareness, reviewing international experience and piloting the system in eight sites across the three spheres of government.

“The next phase is expected to conclude in December 2023. It will involve refining the climate budget tagging framework for additional testing and formal rollout, consulting stakeholders, revising guidance materials and setting up governance arrangements,” the Minister said.

Water management

Over the years, government has observed the impact of poor water management leading to polluted water sources and limited access to clean water for its citizens.

“To address this challenge, the government is making changes to conditional grants, starting with the urban settlement development grant, the integrated urban development grant, and the municipal infrastructure grant.

“These changes include the reconfiguring of grants and revising the grant conditions to align them with the Green Drop, Blue Drop, and No Drop assessments relaunched by the President as part of efforts to ramp up the performance of water service authorities,” the Minister said.

In addition, National Treasury will be working with local governments and the Department of Cooperative Governance and Traditional Affairs to develop new funding models, so that municipalities can continue to earn revenue through the transition to more self-generation of electricity by firms and households. –SAnews.gov.za

 

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Wed, 11/01/2023 - 14:14

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SOE financial health remains “poor”

Location: News

SOE financial health remains "poor"

The Medium Term Budget Policy Statement (MTBPS) has revealed how South Africa’s weak growth combined with arduous debt repayment obligations and other factors continue to affect the financial health of state-owned enterprises (SOEs).

The MTBPS was tabled in the National Assembly by Finance Minister Enoch Godongwana on Wednesday.

“Since 2019, weak economic growth has compounded the poor financial position of most state-owned companies. Capital investment continues to slow, falling below company budgets, with some large enterprises facing serious liquidity problems.

“Operational inefficiencies, high cost structures and onerous debt obligations continue to hamper profitability and cash flows, intensified by non-payment for services. Many companies are unable to attract funding at favourable rates and terms, and rely on fiscal funding for support,” the statement read.

Debt repayments for SOEs over the medium term are expected to reach R121 billion.

“The large domestic capital repayment in 2023/24 stems from the maturity of bonds issued by the Industrial Development Corporation, the Development Bank of Southern Africa, Transnet and the South African National Roads Agency Limited (SANRAL).

“In the following three years, capital repayments will be relatively lower as state-owned companies build cash flows to manage maturities. Capital repayments are expected to decline significantly after another spike in 2027/28,” the statement said.

Denel

According to the statement, Denel remains in “financial distress” with no annual financial statements submitted since the 2019/20 financial year.

“In March 2023, government disbursed R1.9 billion to Denel through the Special Appropriation Act (2022). The disbursement was proportionate to the entity’s share of proceeds from the sale of non-core assets. Denel used this funding to help settle debt obligations, pay for restructuring and enhance working capital.

“The remaining portion remains ring fenced until other non-core assets are sold. In September 2023, Denel requested that a further R100 million of the ring fenced funds be released to settle the last government guaranteed debt obligation. Following its settlement, Denel has no debt obligations remaining and its government guarantee will be revoked,” it said.

Land Bank

Similarly to Denel, the Land Bank is in default since failing to meet its April 2020 debt obligation.

“At the end of 2022/23, the National Treasury transferred R5.1 billion to the Land Bank, subject to conditions, as part of a R7 billion fiscal allocation. Government has repaid approximately R1.4 billion to all guaranteed lenders of the Land Bank since its default, eliminating its guarantee exposure.

“The remaining portion of the R7 billion fiscal allocation will be transferred to the Land Bank in this financial year to use in its blended finance scheme during March 2024,” the statement said.

Transnet

State freight rail, ports and logistics company, Transnet continues to face “weak profitability and deteriorating liquidity” stemming from “operational challenges, a high debt burden and low cash flows”.

“A prolonged period of underinvestment in capital infrastructure and maintenance backlogs have combined to limit revenue-generating capacity. Transnet has initiated a five-year R122.7 billion capital investment programme, including R99.5 billion for operational maintenance and R23.2 billion to expand infrastructure, starting in 2023/24.

“Further borrowing is restricted by its existing debt, which stood at R130 billion at the end of March 2023, and declining revenues. Transnet’s issued guarantee remains at R3.5 billion,” the MTBPS said.

South African National Roads Agency Limited (SANRAL)

Treasury explained that SANRAL’s investment capacity has been stymied by a long standing dispute over the Gauteng Freeway Improvement Programme.

“Government’s decision to take over the Phase 1 commitments will support SANRAL’s ability to finance the strengthening, rehabilitation and expansion of the toll road network.

“As a result of revisions to SANRAL’s borrowing limits and guarantees associated with the R23 billion injection made in the 2022 Adjustments Budget, SANRAL will now seek approval to revise its funding plan to ensure continued investment in the national road network,” the statement read. – SAnews.gov.za

 

NeoB
Wed, 11/01/2023 - 14:08

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Multi-stakeholder workshop looks into migration impact on rural areas, local government

Location: News

Multi-stakeholder workshop looks into migration impact on rural areas, local government

Government has set out to review areas of cooperation among various stakeholders following the successful International Migration Workshop with traditional leaders and mayors from metro and district municipalities earlier this month.

Home Affairs Minister, Dr Aaron Motsoaledi and Cooperative Governance and Traditional Affairs Minister Thembi Nkadimeng, co-hosted the workshop in October in Ekurhuleni, Gauteng.

The purpose of the workshop was to provide a platform for stakeholders to share practical experiences on how migration impacts the communities they lead at local level, and to identify possible areas of cooperation.

Motsoaledi and Nkadimeng were joined by other ministries who, in view of their legislative mandates, are directly affected by the issue of international migration.

They included Human Settlements Minister Mmamoloko Kubayi; Small Business Development Minister Stella Ndabeni-Abrahams and the Department of Trade, Industry and Competition, led by Acting Director-General, Malebo Mabitje -Thompson.

Other key stakeholders were the Public Service Commission Chairperson Prof Somadoda Fikeni, Border Management Authority Commissioner Dr Mike Masiapato and a delegation from the South African Local Government Association (SALGA), led by President Cllr Bheki Stofile, Mayors and Speakers from Districts, Metropolitan and Local Municipalities.

There were also leaders from the National House of Traditional and Khoi and San leaders led by its chairperson, Kgosi Thabo Seatlholo, all provincial houses of traditional leaders led by their chairpersons, the Congress of Traditional Leaders of South Africa (“CONTRALESA”) led by  its President, Kgoshi Lameck Mokoena, the National Khoi and San Council led by Deputy Chairperson, Mr Anthony Peterson and the Royal Leaders of South Africa (“ROLESA”) led by Secretary-General, Kgoshigadi Moremadi Mothapo.

The workshop agreed on key areas of cooperation to achieve effective management of migration, and these include:

  • Review of international agreements (Conventions and Protocols) with a view to accede to them with reservations where necessary, taking national interest into consideration.
  • Policy and legislative reforms, including the following legislation: Citizenship Act (Act 88 of 1995), Identification Act (Act 68 of 1997), Refugee Act (Act 130 of 1998) and Immigration Act (Act 13 of 2002).
  • Introduction of Omnibus by-laws to promote standardised and effective enforcement by all municipalities. This will address the challenges relating to trading and enforcement of business by-laws by municipalities and traditional authorities.

“In support of this intervention, there will be immediate joint inspections of businesses by labour, health, trade, industry and competition and immigration inspectorate teams to enforce compliance with applicable laws.

“Government will assist in strengthening the planning units in municipalities so that they are able to interpret the data and prepare development plans that are aligned to the current trends. [The auditing] of spaza shops in villages and townships and mechanisms to register them by both traditional leaders and municipalities [should also take place],” the Department of Home Affairs said.

The meeting also looked at reviewing of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (Act 19 of 1998) to facilitate the effective implementation in instances of illegal occupation of land.

The meeting also agreed on the following:

  • Strengthening Local Economic Development (LED) through, among others, supporting citizens who wish to trade in the informal sector; ensuring that business licensing legislation is amended, and promoting the assignment of LED Officers, who would also interface with traditional authorities.
  • Supporting the Department of Human Settlements process of reviewing the 1994 White Paper to respond to current needs and challenges related to informal settlements and illegal occupation of buildings in inner cities.
  • Coordination and collaboration of border law enforcement between government, traditional and Khoi-San leaders and the Border Management Authority (BMA).
  • Supporting traditional authorities to keep a record of foreign nationals in their communities
  • Reviewing resource allocation for municipalities to address the unique resources pressures of municipalities and also capacitation of municipalities on data analysis.
  • The establishment of a working group that will meet regularly to track progress on the work done by various entities and government departments to ensure a ‘whole of government and civil society’ approach towards managing international migration and its effects.

“We are pleased that SALGA has already issued a statement on the workshop. This is in the spirit of cooperation and partnership which the workshop called for. We look forward to more role players coming on board to lend their hand in this important matter of national importance,” the department said. – SAnews.gov.za

Edwin
Wed, 11/01/2023 - 09:32

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Partnerships are key to decarbonizing the South African economy.

Location: MyPR

The “energy trilemma” of delivering lower carbon energy that is affordable and secure is an issue facing all businesses and policymakers in the energy space. We believe that the world’s leading energy companies meaningfully want to achieve all three priorities. In January 2023, the New York Times reported that 2022 was the fifth-hottest year on …

Read morePartnerships are key to decarbonizing the South African economy.

President Ramaphosa to welcome rugby world champs

Location: News

President Ramaphosa to welcome rugby world champs

President Cyril Ramaphosa will on Thursday morning welcome the Rugby World Cup Champions, the Springboks, to the Union Buildings in Pretoria.

The Springboks won the 2023 Rugby World Cup against New Zealand in Paris, France on Saturday.

The welcome ceremony at the Union Buildings for the national team signifies the start of the Rugby World Champions’ National Trophy Tour.

The team touched down at the OR Tambo International Airport on Tuesday to a rousing welcome from the public.

The Webb Ellis Cup parade will kick off on Thursday in Pretoria, Johannesburg and Soweto, concluding at FNB Stadium; and proceed to Cape Town on 03 November 2023; Durban on 04 November 2023 before the tour ends in the Eastern Cape (East London) on 05 November 2023.

Members of the public in Pretoria are welcome to witness this event from Government Avenue, Arcadia.

President to update Parliament 

Meanwhile, President Ramaphosa will on Thursday afternoon engage with Members of Parliament (MPs) on diverse national issues when he responds to Questions for Oral Reply in the National Assembly.

Among issues MPs have raised with the President are:

• the mandate of the South African Reserve Bank (SARB) and its accountability to Parliament;
• commissions of inquiry established by the President;
• combating violence against women and children;
• insights gained from the Census 2022 for macro-economic policy;
• fiscal discipline within Government.
 
The President will also discuss the state of readiness of the South African National Defence Force (SANDF) and its capacity to fulfill its constitutional mandate.
 
Parliamentary Questions for Oral and Written Reply are one of the mechanisms through which Parliament holds the Executive to account.

The questions session will start at 14:00. – SAnews.gov.za

 

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Wed, 11/01/2023 - 09:40

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Call for a realistic 2023 MTBPS

Location: News

Call for a realistic 2023 MTBPS

North-West University Business School Professor Raymond Parsons has called for a realistic and sound Medium-Term Budget Policy Statement (MTBPS), given the additional fiscal and economic challenges facing the country.

“The National Treasury has already warned of the tough decisions that will need to be taken in the medium-term budget. A shortfall of about R100 billion is now widely forecast. Unless remedial steps are taken, the risks of another 'fiscal cliff' for South Africa will rise,” Parsons said.

He said the latest Monetary Policy Review also emphasised that a lack of fiscal sustainability would keep interest rates elevated for longer.

His appeal comes ahead of Minister of Finance Enoch Godongwana’s MTBPS, which will be tabled at the National Assembly in Cape Town today.

“It is now generally recognised that the combination of low growth, less-than-expected tax revenues, and continued high government spending means that the economic and financial assumptions on which the 2023 Budget projections in February were based are no longer valid.

“Several of the fiscal risks outlined in the main Budget have materialised. These factors have now severely reduced available fiscal space, necessitating a realistic approach to a less favourable set of circumstances. If the medium-term Budget is not credible in its actions, it will be assumed that there will just be more borrowing or big tax rises to come later,” Parsons said.

He identified government bailouts to struggling state-owned enterprises as a persistent problem.

“Transnet recently asked government for financial support – which is basically a bailout – to implement its turnaround plan. The Bureau for Economic Research has warned that Transnet’s request comes at an inopportune time for the fiscus.

“How the National Treasury decides to respond to Transnet’s need for further assistance will be seen in the MTBPS. South Africa is already at the outer boundary of what it can reasonably do to contain its debt burden and stabilise its public finances. Reducing the deficit inevitably now means recalibrating the broad dynamics of its public finances,” he said.

With the debt-to-GDP ratio now over 70% and expected to increase further, Parsons said South Africa's rising debt bill is already absorbing too large a share of the budget at the expense of other major social spending and infrastructure.

“A long-range fiscal plan is, therefore, now needed to steadily wind down spending and debt and bring them under control in a way that establishes clear priorities for the future.

“Fiscal policy will inevitably have to be pragmatic and realistic to deliver sensible trade-offs in order to project a credible medium-term Budget that offers more predictability and certainty.

“This fiscal balancing act will, therefore, require a skilful but level-headed revised Budget ‘mix’ and projections. It requires successfully managing multiple spending pressures at a time when political elections are pending in 2024,” he said.

Credibility

Parsons emphasised that the medium-term Budget must be a credible fiscal plan that does enough in challenging economic circumstances to placate nervous markets and not allow excessive borrowing to 'crowd out' the private sector.

“It is apparent that, whatever other steps may be needed to 'balance the books', all roads eventually run through inclusive growth if South Africa wants fiscal sustainability in the longer term. And if, through job-rich growth, South Africa can also move more citizens out of welfare and into work, a lowering of the quantum and risks of welfare dependency will also improve the fiscal balance.

“The number of countries that have grown successfully out of large debt is really quite small, whereas the number of economies that got into major fiscal difficulties that ultimately ended in inflation and other economic distortions is quite large.

“This emphasises why there can be no complacency about the immediate medium-term Budget challenges and no doubt about the National Treasury's determination to keep the fiscal situation manageable,” he said.

Parsons said the 2023 MTBPS which is also known as the mini budget,  must reinforce the overall message that the trajectory of South Africa’s GDP growth (and potential growth) will, eventually, be driven mainly by the pace at which structural reforms materialise, especially on the energy front.

“The medium-term Budget needs to reflect a renewed commitment to do what is necessary to help reduce South Africa's risk premium by strengthening the pillars of fiscal sustainability,” he said. –SAnews.gov.za

nosihle
Tue, 10/31/2023 - 10:30

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Read moreCall for a realistic 2023 MTBPS

SSL Certificates And HTTPS In SEO

Location: MyPR

You’ve probably noticed that little padlock icon next to a website’s URL and wondered what it’s all about. It’s more than just an icon, it’s a sign of security – the result of something called SSL certificates and HTTPS. But what are they exactly? And why do they matter for SEO? Well, as you navigate …

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Operation Shanela nets 597 suspects in the North West

Location: News

Operation Shanela nets 597 suspects in the North West

The South African Police Service (SAPS) conducted various high-density operations in the North West province last week, which resulted in 597 suspects being arrested for various crimes.

The suspects were arrested during an Operation Shanela initiative which was held from Monday, 23 October 2023, to Sunday, 29 October 2023.

According to a statement by the police, among others, four arrests were made for drug-related offences, 11 for dealing in liquor, 21 for driving under the influence of liquor, three for possession of firearms and ammunition and 66 were undocumented persons who were handed over to the Department of Home Affairs for further processing.

The following arrests were made for serious and violent crimes: six for murder, four for attempted murder, five for armed robbery, 149 for assault with the intent to do grievous bodily harm, three for business robbery, 41 for burglary, 30 for malicious damage to property, 13 for rape and 104 for common assault.

During the operations, two firearms with ammunition, eight cellular phones as well as a variety of drugs and precious metals were confiscated.

Some of the suspects have already appeared before court while others are expected to make their respective court appearances this week in various courts in the province.

During the operations, 93 premises were searched, 12 road blocks were held and 11 unlicensed liquor premises were closed down.

In one of the incidents, a 45-year-old police officer was attacked with a sjambok in Extension 4, in Lebaleng location, Makwassie, by an alleged tuck shop owner while a law enforcement team was conducting consumer inspections.

The suspect attacked the police officer from behind, while he was removing expired products from the tuck shop. The officer was taken to a local clinic for medical treatment.

Investigations are underway and an arrest is imminent, said police.

The Provincial police Commissioner in the North West, Lieutenant General Sello Kwena, said an attack on a police officer is an attack against the state and it will not be tolerated.

He warned that consumption of expired goods could cause people to fall ill and even die, therefore the police will continue to work hard together with other government departments to ensure the safety of the community. – SAnews.gov.za 

 

Edwin
Tue, 10/31/2023 - 09:50

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Permits to change the lives of farmers

Location: News

Permits to change the lives of farmers

By Gabi Khumalo

A group of farmers have dispelled the myth that government initiatives seldom have an impact on the lives of ordinary, real people.

Recently, 664 hemp and cannabis farmers who are on the KwaZulu-Natal Agriculture and Rural Development (DARD) database, received permits which grants them authorisation to cultivate, store and transport content with a Tetrahydrocannabinol (THC) of not more than 0.2%.

THC is the major psychoactive component and one of the 113 cannabinoids recognised in cannabis.

What does the handing over of the permits mean you ask? It means that the permits, handed over at a provincial Cannabis Expo and Conference, held at Okhahlamba Sports Complex in Bergville, will enable the farmers to have access to cutting edge technology through the Analytical Lab based at Cedara in uMgungundlovu District Municipality, near Pietermaritzburg.

To grow the local sector, the MECs of the provincial Departments of Agriculture and Rural Development (DARD) and Economic Development, Tourism and Environmental Affairs (EDTEA) invited captains of industry, including experts, academics, Amakhosi and local growers to a two-day expo and conference to share ideas that will grow the sector to its full potential.

Held under the theme: “One love, one heart,” the event provided a platform for local cannabis and hemp farmers, and others with an interest in the sector to engage with business and academia. 

Among the issues under discussion were that of regulations, registration, production, agro processing and exports.

Local business who will be providing services to permit recipients were also granted R300 000 each. Services include processing, erecting tunnels and providing lab equipment, packaging, testing, and finding a market for farmers.

Masterplan

The first citizen of the province, Premier Nomusa Dube-Ncube said the expo and conference will be etched in the minds of the people, as the starting point of a “new era for the cannabis sector in the province.”

Dube-Ncube noted that many milestones had been achieved through the KZN Cannabis Masterplan.

“Through DARD we have set aside an amount of R47 million for cannabis research. We have allocated R10 million to assist farmers in cannabis production and hemp permit application. 

“We have facilitated an investment commitment of R120 million and we have participated in the Cannabis and Hemp Phakisa Action Lab in order to secure much-needed policy coherence and to ensure closer collaboration amongst government entities," she explained.

This as pilot projects targeting commercial growers are ongoing, and the province has supported several investment leads, which were in the process of rolling out district-based capacity building programmes under the umbrella of the proposed KZN Cannabis Association.

Reaping the rewards

EDTEA MEC Siboniso Duma said, the expo had been a success and that the work by both EDTEA and DARD was just beginning.

“We want our farmers to be the champions of the cannabis sector and we want them to be able to speak for themselves. We are giving them an assignment to come closer to us because what we have started together, will change people’s lives,” Duma said.

Meanwhile, DARD MEC Super Zuma said the province has worked steadfastly and the time to unlock the province’s prosperity through the hemp and cannabis sector, had now arrived.

“We have ensured a smooth process for our hemp permit holders and we covered all their costs. We are winning the fight to alleviate poverty and unemployment and we are extremely proud of the ongoing collaborative work that continues behind the scenes, and I must say all our collaborative efforts have yielded fruit,” Zuma said.

Permit recipient from the Umzinyathi District Municipality, Sphelele Shezi, said this was the beginning of great things for her small business of hair products, noting that the success of the products relies on hemp seed oil.

“I applied for my permit in July because I want to start extracting oil to use in our hairspray. We also manufacture shea butter which will soon be hemp infused. 

“This permit will allow my business to grow and I have a vision of owning a manufacturing plant which will open up job opportunities,” Shezi said.

The owner of Old Grey Distillery--which manufactures cannabis infused beverages in Johannesburg-- Derek Collard, said his business has received great exposure at the expo.

“The expo has been superb. We started our business when cannabis became legal and we started experimenting with different cannabis infused gin flavours. We have met incredible contacts that we will be supplying. There are business opportunities as well as local growers that we could potentially partner with,” Collard said.

Nonhlanhla Qhoboshiyane, a hemp and cannabis farmer from Durban, who was introduced to the plants after falling ill, said she was grateful for the opportunity to be part of the informative expo.

“My interest started in 2016 when my husband and I were diagnosed with cancer. We used hemp oil and we would make cannabis leaf tea to help with the pain. 

“These plants are from the Lord, created to bring about economic recovery in South Africa, there should be no stigma attached to them. The rural economy will grow because of hemp and cannabis,” she said. 

Investment  

In the 2023 State of the Nation Address (SONA), President Cyril Ramaphosa reiterated government’s commitment made in 2022 to unlock investment in the hemp and cannabis sector.

During the Phakisa Action Lab gathering held in June 2023, the President said the cannabis and hemp sector is one of 14 priority sectors that have been defined in government’s Country Investment Strategy as holding significant potential to secure investment, job creation and support for sustainable rural livelihoods, in recognition of people’s rights.

“I am confident that the collaborative commitment to work together which characterises our society, will find expression in the Hemp and Cannabis Phakisa, leading to immediate short term regulatory reform, the adoption of a set of foundational policy principles to achieve longer term legislative reform and a detailed plan to achieve inclusive growth and investment,” the President said at the time.

Participants at the Action Lab collectively agreed on the regulatory reforms required to better enable the development of the hemp and cannabis sector. 

The reforms will unlock the potential of cannabis in African traditional medicine; pharmaceutical and complementary medicines; and multiple industrial applications.
 
The regulatory reforms agreed to include reviewing the schedules to the Medicines Act to further enable cannabis grown for non-medicinal uses, including industrial purposes. 

The Phakisa Action Lab further resolved to explore mechanisms to fast-track the removal of cannabis from the Drugs Act.

This will be a historic achievement through which the cultivation of non-medicinal cannabis will be legal under the terms and conditions of the Plant Improvement Act, which falls under DALRRD.

The development of the hemp and cannabis industry has so far seen the issuing of 83 cannabis licences, four manufacturing licences and 30 research permits by the South African Health Products Regulatory Authority (SAHPRA) since 2022. The authority is an entity of the Department of Health

The Department of Agriculture, Land Reform and Rural Development has also issued 371 hemp permits, which has enabled significant investment, employment creation, the application of technology, intellectual property development and exports to highly competitive global markets.

And that is no smoke and mirrors story. -  SAnews.gov.za

 

GabiK
Tue, 10/31/2023 - 11:43

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Read morePermits to change the lives of farmers

President to update Parliament on accountability of South African (SA) Reserve Bank and efforts to combat violent crime

Location: News

The Presidency: Republic of South Africa
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President Cyril Ramaphosa will on Thursday, 02 November 2023, engage with Members of Parliament (MPs) on diverse national issues when he responds to Questions for Oral Reply in the National Assembly.

Among issues MPs have raised with the President are:
• ​the mandate of the South African Reserve Bank (SARB) and its accountability to Parliament;
•​ commissions of inquiry established by the President;
• ​combating violence against women and children;
• ​insights gained from the Census 2022 for macro-economic policy;
• ​fiscal discipline within Government.

The President will also discuss the state of readiness of the South African National Defence Force (SANDF) and its capacity to fulfill its constitutional mandate.

Parliamentary Questions for Oral and Written Reply are one of the mechanisms through which Parliament holds the Executive to account.

The Questions session will start at 14h00.

Distributed by APO Group on behalf of The Presidency: Republic of South Africa.

Read morePresident to update Parliament on accountability of South African (SA) Reserve Bank and efforts to combat violent crime

SA in numbers

Location: News

SA in numbers

78%  – the percentage of households in formal dwellings in 2011, which rose to 89% in 2022.

89% – the percentage of households in formal dwellings in 2022, which rose from 78% in 2011.

3 – years since government embarked on the Economic Reconstruction and Recovery Plan, by 30 October 2023.

More than 2 million – jobs lost due to the negative economic effects of the Coronavirus pandemic.

2 million – the increase in the number of people with jobs over the last two years, bringing the level of employment close to its pre-pandemic level.

R350 – the value of the Social Relief of Distress Grant introduced by government in 2020 to keep millions of people out of poverty, and continues to provide much-needed support for those who are unemployed.

Over 1.2 million – employment opportunities created by the Presidential Employment Stimulus since its establishment, representing the largest expansion of public employment in South Africa’s history.

Over 4 million – young people registered on the SAYouth online platform, by 30 October 2023.

More than 1 million – young people  registered on the SAYouth online platform, who have been able to access opportunities for learning and earning, by 30 October 2023.

26 – commuter rail corridors, out of 40, whose operations had been restored by the Passenger Rail Agency of South Africa, by 30 October 2023.

R50 billion – the amount to be spent over the next three years to modernise South Africa’s passenger rail network.

R17 billion – the value of the investment into the Mzimvubu Water Project in the Eastern Cape.

Over 12 000 – megawatts of confirmed projects in development as part of regulatory reforms government has initiated to enable a massive increase in private investment in electricity generation.

Over 4 500 – megawatts of installed rooftop solar that have more than doubled in the last year following the introduction of tax incentives and financing mechanisms.

20 – Economic Infrastructure Task Teams established by the South African Police Service throughout the country to protect critical infrastructure and tackle the “construction mafia”.

880 – members of the South African National Defence Force to be employed to support the police in combating criminal activity that targets critical economic infrastructure.

Over 3 000 – people arrested for illegal mining.

34 – State capture and corruption cases taken to court by the National Prosecuting Authority’s Investigating Directorate over the last four years, involving 205 accused persons.

205 – accused persons involved in 34 State capture and corruption cases taken to court by the National Prosecuting Authority’s Investigating Directorate over the last four years.

R14 billion – the value of freezing orders granted to the Asset Forfeiture Unit for State capture related cases.

Around R5.4 billion – the value of money recovered by the Asset Forfeiture Unit and returned to the State, by 30 October 2023.

18 cents – the amount for every rand that government collects in revenue that goes towards servicing South Africa’s national debt.

Over 6 months – the period during which government will accelerate the implementation of economic reforms.

4 – the number of times the Springboks became the world champions since the advent of democracy in South Africa in 1994.

15 December – the Friday in December 2023 that President Cyril Ramaphosa has declared a public holiday in celebration of the Springboks’ momentous achievement and the achievements of all other sportsmen and sportswomen – and as a tribute to the resolve of the united nation. It is a day of hope, celebration and unity.

Matona
Tue, 10/31/2023 - 09:02

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African Risk is not Fairly Priced

Location: News
Rand Merchant Bank

By Miranda Abraham, Head of Loan Syndications at RMB in London (www.RMB.co.za)

Yield-chasing investors have poured money into the continent but an emerging, recent challenge for Africa is that in a now higher interest rate environment, investors don't need to come to Africa to find higher returns.

Even US treasuries are now yielding far more attractive yields than just a month ago: 3-month government bonds offer 5.32% and while 2-year bonds offer a yield above 5%. Yields have risen in part in response to Fitch's recent downgrade of the US from AAA to AA+, echoing S&P's move in 2011.

African bond issuers, spooked by the high-interest rate environment and refusing to issue bonds above the psychological barrier of double-digit yields for Sub-Saharan African bonds, continue to wait it out on the sidelines.

But with interest rates continuing to climb, the wait-and-see strategy is no longer looking like a sensible approach. Issuers are running out of cash and the more stable and resilient syndicated loan market – with its heavily relationship-driven pricing, is increasingly proving to be an alluring alternative to the bond market.

African governments should therefore bring forward planned borrowing before the capital shifts away, as it is already starting to do, and the cost of borrowing rises further still.

The syndicated loan market is dominated by relationship banks, who will consciously and willingly price a loan at very low yields, in order to secure a lead mandate and lock in the ancillary opportunities and revenues that come with being a core relationship bank. 

Banks do this knowing that they will also be able to persuade other relationship banks to join the deal as well. This is why syndicated loans always tend to price at a subsidized level when compared to bonds – where investors are more agnostic and definitely less loyal – focusing instead on the relative value of opportunities across the market.

However, while bond prices have skyrocketed, the loan market has hardly moved in terms of pricing. Yes, base rates are higher, resulting in higher all-in costs for borrowers, but on an all-in basis, when compared to bonds, issuing a syndicated loan is definitely the cheaper option for borrowers.

But why have African issuers managed to price debt at such attractive levels for so long?

There are three main reasons:

  • Finite supply: There is a limited supply of investable assets in Africa and those banks with an African focus are eager to support their key clients and to get exposure to the African market, which is seen as having strong growth potential. 
  • Difficulties in assessing risk: It can be difficult to assess the credit risk of African borrowers. This is because there is less historical data available, and the political, legal and regulatory environment is often complex. Joining a syndicated loan or bond that has been oversubscribed and so carries the stamp of endorsement from the market can be an attractive solution to this challenge.
  • Those issuers that are active in the loan market tend to bring with them an array of other ancillary opportunities (e.g. IPO, Eurobond, and Advisory mandates), in a region where businesses that are succeeding are usually experiencing high growth.

So finite supply leads to fierce competition for these prestigious African clients and the fact that these credits are complex and difficult to understand exacerbates the problem. 

As a result of these factors, African risk is often not being priced fairly. South Africa is a good example of how African risk can be underpriced. Despite losing its investment grade rating in 2017, South African corporates and State-Owned Enterprises (SOEs) continue to price their debt like they are in Western Europe. This is because there is a limited pool of opportunities for those banks that prefer to lend in ZAR to invest in.  

Relationship pricing works for the banks because they are able to use the revenues from ancillary business to subsidize their commitment to the loan, but for regular investors (who are typically looking on an asset play basis) they can end up being short-changed. This means that investors may be taking on more risk than they realise, for a relatively low return.

However, instead of adjusting pricing upwards, the imbalance is being addressed another way - by adjusting risk.

Reducing the risk keeps pricing low and so address issuers concerns around paying double-digit yields.

Risk mitigation tools (in the form of ECA wraps, DFI guarantees or insurance wraps) are being embedded into loans and so while pricing remains low, investors improve their returns through adjusting the risk.

These type of credit risk mitigated deals, result in investment grade ratings, but with a substantial African premium. In the EUR 1bn Bank of Industry deal, BOI/AFC pays a yield of about 200bps versus an average yield of 75ps for an A3 rated credit in Europe. It is the only way for many international and European banks – who typically shy away from low BB or single B African risk - to fill their African buckets. 

These investors have a whole world of investment opportunities available to them, from AAA through to single B risk, usually across the globe, so they can pick and choose their deals.  Consequently, in order to attract their investment into Africa, pricing on these credit enhanced deals has to be highly attractive relative to other similarly opportunities globally.

However for those emerging market investors or African banks focused on Africa, their return hurdle requirements mean that the credit enhanced deals do not work for them. 

Instead, they are obliged to find African opportunities that represent real, uncovered African risk.  However, the market paralysis created by a difficult credit environment, combined with the fact that a large proportion of those deals that do come to market include some form of credit enhancement, means that the pool of deals offering pure, uncovered African risk is now much smaller.

And this is where supply and demand dynamics take over. 

African banks and investors are desperate for assets and are very comfortable assessing and understanding sub investment grade African risk. However this dynamic of fewer deals but strong investor demand has led to plentiful pent up liquidity down the credit curve.

Ironically, once African investors get over the hurdle of higher return requirements (often driven by higher cost of funding) there is such relief that pricing works from a returns perspective, that they can then end up effectively under-pricing the actual credit risk. So we end up with BB- loans paying only 450bps versus BB average bond yields of 12%.

Investors in Africa are a finite pool who know and understand African risk. They deserve to be fairly compensated for the risk they take.  

Distributed by APO Group on behalf of Rand Merchant Bank.

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Rand Merchant Bank
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Government partners with business to tackle economic challenges

Location: News

Government partners with business to tackle economic challenges

Government has established a partnership with business to work together in four critical areas, including energy, logistics, crime and corruption, and employment to give impetus to efforts currently being undertaken.

President Cyril Ramaphosa said this while delivering an address to the nation updating on the Economic Recovery progress on Monday.

“We continue to collaborate with organised labour and civil society to ensure a whole-of-society approach to addressing the most important challenges our country faces. All of this gives us hope that we are turning the tide on the many challenges that we face,” the President said.

This month marks three years since government embarked on the Economic Reconstruction and Recovery Plan, which outlined the actions that it would take to rebuild the economy and create jobs in the wake of the COVID pandemic.

The President acknowledged that the last three years have been extremely challenging, as the country emerges from more than a decade of stagnant economic growth, compounded by the impact of the pandemic.

“We are working to reverse the legacy of the past era of corruption and mismanagement of our State-owned enterprises, which has left us with a persistent energy crisis and an inefficient ports and rail network.

“And we are contending with a range of global and domestic pressures which have set back our economic recovery. And yet, there are clear signs that our efforts are showing results. Electricity supply is improving. Jobs are being created.

“Houses, roads, bridges and dams are under construction. Law enforcement agencies are cracking down on criminal syndicates. The proceeds of State capture are being recovered. These are reasons for hope,” President Ramaphosa said.

Since then, in the midst of severe load shedding and increased global volatility, he highlighted that the economy has continued growing, albeit too slowly. He added that the economy has shown a significant degree of resilience and is now larger than it was before the pandemic.

Reforms – Energy Action Plan

Turning to one of the main challenges in the country, President Ramaphosa told the nation that progress is being made towards ending load shedding.

“We are making progress towards ending load shedding. Our greatest priority has been to reduce the severity and frequency of load shedding to achieve energy security. Over the last few months, there has been a measurable decline in the severity of load shedding,” the President said.

He noted that the Energy Action Plan he announced in July last year is showing positive results, “giving us greater confidence that we will bring load shedding to an end”.

The President said that regulatory reforms that have been initiated have enabled a massive increase in private investment in electricity generation, with over 12 000MW of confirmed projects in development.

Following the introduction of tax incentives and financing mechanisms, he said that the amount of installed rooftop solar has more than doubled to over 4 500MW in the last year.

“The steady progress we are making in resolving the energy crisis is a reason for hope,” he said.

Infrastructure

Another commitment made in the Reconstruction and Recovery Plan was to fix South Africa’s infrastructure through renewed investment in maintenance and construction of new projects.

The President highlighted that several significant infrastructure projects are underway.

“These projects are both contributing to greater economic activity and jobs, and providing much-needed infrastructure for the growth of our economy and the needs of our people.

“These infrastructure projects range from social housing, road construction, rural bridges, and dam constructions,” he said.

President Ramaphosa further highlighted that the Passenger Rail Agency of South Africa has to date restored operations on 26 out of 40 commuter rail corridors.

To continue with the restoration of the country’s commuter rail corridors, he said R50 billion will be spent over the next three years to modernise the passenger rail network.

As part of the infrastructure build, the President said that the sixth administration is undertaking significant water infrastructure projects. These include Phase II of the Lesotho Highlands Water Project and the Mzimvubu water project in the Eastern Cape, which will involve an investment of R17 billion.

“Around the country, water treatment works are being upgraded, pumping stations are being repaired, and pipes are being laid to get water to under-serviced areas,” he noted.

Logistics system

President Ramaphosa said the country is making progress in restoring its logistics system to world-class standards, so that SA can export goods to global markets.

The National Logistics Crisis Committee is overseeing a range of interventions to stabilise and improve the performance of the logistics system in the short term, in addition to ongoing reform to improve its efficiency and competitiveness in the long term.

He said the Transnet board has developed a turnaround plan, which aims to increase volumes transported on SA’s network.

“Progress is also being made with the introduction of private sector participation in container terminals. I want to make it clear that South Africa’s port, rail and electricity infrastructure are strategic national assets, and that they will remain in public ownership.

“However, introducing competition in operations – both in electricity and logistics – will create greater efficiency and reduce prices in the long term, just as the introduction of competition in the telecommunications sector has led to greater choice and enormous benefits for consumers,” he said. – SAnews.gov.za

 

DikelediM
Mon, 10/30/2023 - 21:50

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Read moreGovernment partners with business to tackle economic challenges

Social protection key to SA’s ongoing recovery position

Location: News

Social protection key to SA’s ongoing recovery plan

The introduction of measures designed to cushion the effects of the economic downturn exacerbated by the COVID pandemic has played a substantial role in keeping millions out of poverty in South Africa.

Speaking to the nation on Monday evening, President Cyril Ramaphosa said one of the key pillars of the reconstruction and recovery plan, post COVID-19, was the expansion of social protection and public employment.

The President was frank about the mammoth task that lies ahead in moving the country forward, in terms of creating the requisite jobs and expanding the economy. However, he commended the role played by the country’s commitment to strengthening social protection through initiatives designed to propel the recovery trajectory.

“Over the last two years, the number of people with jobs has increased by two million, bringing the level of employment close to its pre-pandemic level.

“The special SRD [Social Relief of Distress] Grant, known as the R350 grant, which we introduced in 2020, has kept millions of people out of poverty, and continues to provide much-needed support for those who are unemployed.

“The Presidential Employment Stimulus has created over 1.2 million opportunities since its establishment, representing the largest expansion of public employment in South Africa’s history,” the President said.

To date, over four million young people have registered on the SAYouth online platform, and more than one million of them have been able to access opportunities for learning and earning.

“Every one of those jobs created is a reason for hope. Every person who no longer lives in poverty is a reason for hope,” President Ramaphosa said.

Acknowledging the sustained challenges imposed by domestic and global pressures on the South Africa economy, the President made it clear that constraints to growth, including load shedding and the underperformance of the ports and rail network, must be overcome if the country is to realise its own economic growth targets.

Government spending, the President noted, has exceeded revenue since the 2008 global financial crisis, without a commensurate increase in economic growth.

“As the Minister of Finance has noted, for every rand that government collects in revenue, 18 cents go towards servicing our national debt. This means that we are now paying more in interest on our national debt than we are budgeting for the police force.

“Ultimately, more rapid and inclusive growth is the only solution to unemployment, poverty and inequality. Growth is also necessary for the sustainability of public finances.”

The President reiterated the commitment to stabilising the levels of debt and adopting a responsible fiscal policy, saying that the Minister of Finance will set out government’s plans to achieve this trajectory in the Medium Term Budget Policy Statement (MTBPS) on Wednesday, 1 November.

Strengthening municipal performance

The President said urgent and necessary interventions are being undertaken at municipal level in order to improve service delivery in the areas of water and sanitation, electricity, roads and waste collection.

“These interventions are accelerating service delivery where basic services have collapsed.  

“While addressing the immediate problems, we are introducing necessary institutional reforms and professionalisation in the appointment of senior municipal officials.”

Spending on health, education, policing and other essential services will be protected as far as possible, the President said.

“As we move to target spending on programmes that are working for the poor, we need to acknowledge that our social grants, including the SRD Grant, as well as our public employment programmes, are vital in supporting those who are vulnerable.

“These programmes have not only reduced poverty, but have enabled recipients to search for jobs and to engage in other economic activity to support their livelihoods.”

The Minister of Finance is expected to provide more details on these and other spending priorities when he presents the MTBPS on Wednesday.

Tackling crime and corruption

The President said the South African Police Service has established 20 Economic Infrastructure Task Teams throughout the country to protect critical infrastructure and tackle the “construction mafia”.

“We are seeing results in arrests for illegal mining, cash-in-transit heists, cable theft, drug smuggling and similar crimes. Increasing the number of police men and women will further strengthen our capacity to curb acts of criminality.

“I have also extended the employment of 880 members of the SANDF [South African National Defence Force] to support the police in combating criminal activity that targets critical economic infrastructure. The police have arrested several people for extortion at construction sites and made over 3 000 arrests for illegal mining.

“Through the intensive efforts of our law enforcement agencies, dozens of illegal mines, unregulated coal yards and unregistered second hand dealers have been shut down.”

Additionally, the Economic Infrastructure Task Teams have confiscated significant quantities of copper cable, rail tracks, coal and other metals.

Turning to State capture, the President acknowledged that over the last four years, the National Prosecuting Authority (NPA) Investigating Directorate has taken 34 State capture and corruption cases to court, involving 205 accused persons.

Freezing orders of R14 billion have now been granted to the Asset Forfeiture Unit for State capture related cases. Around R5.4 billion has to date been recovered and returned to the State.

“As recommended by the State Capture Commission, we are putting in place laws, institutions and practices that reduce the potential for corruption of any sort and on any scale.

“We are continuing to build meaningful compacts with key stakeholders in a number of areas,” said President Ramaphosa. – SAnews.gov.za

Matona
Mon, 10/30/2023 - 22:13

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Read moreSocial protection key to SA’s ongoing recovery position

Class of 2023 sit for their first paper

Location: News

Class of 2023 sit for their first paper

With the start of the National Senior Certificate examinations today, Minister in The Presidency Khumbudzo Ntshavheni, has expressed confidence in the work done by the Department of Basic Education, schools management and educators to prepare the Class of 2023 for their final exams.

“We are also confident that the learners are ready and have prepared for this crucial examination period. As we wish the Class of 2023 all the best, we take this opportunity to remind them that it is their determination and hard work that will yield positive results,” the Minister said in a statement. 

More than 95% of registered matric exam candidates (almost a million learners) will sit for the English additional language paper today. 

Government has called on parents, guardians, and society as whole, to support these learners as they get tested to become future leaders and impactful role-players in communities.

More than 717 377 full time candidates and 181 143 part-time candidates in the public education system alone are registered to write the final examinations across 6 898 centres nationwide.

At the end of this examination period, the Class of 2023 will have collectively written 207 exam papers.

Government has urged parents and guardians to play a supportive role in their children’s academic journey and create a stress-free environment for studying.

“It is common for learners to feel anxious or overwhelmed during this time and learners are advised to talk to their parents, teachers, someone they trust or contact the South African Depression and Anxiety Group on 0800 567 567.

“The country has a collective responsibility to ensure that the first day of the National Senior Certificate (Matric) examinations are not disrupted,” the Minister said. 

Government also extended well wishes to the more than 72 500 invigilators in 6 898 exam centres, who carry the responsibility of ensuring the integrity of the exams at the coal-face of the examinations. –SAnews.gov.za

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Mon, 10/30/2023 - 09:22

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